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New Plans Aimed to Help Employees Build Larger Nest Eggs

In the coming decade, plan sponsors will increasingly embrace innovative retirement plan designs. These strategies aim to help employees build larger nest eggs and transition smoothly into retirement.

In PLANADVISER’s article "Plans of the Future," Matthew Hedley, Vice President of Retirement Services at OneDigital Investment Advisors, LLC (OneDigital), sheds light on emerging trends that promise to reshape retirement planning. Hedley discusses the expected rise of employer matching in Roth accounts and in pre-plan retirement income solutions, which are part of the broader changes introduced by SECURE 2.0 Act.

Employer Matching in Roth Accounts:

  • Hedley believes that more plan sponsors will offer employer matching in Roth accounts. This strategy allows participants to receive employer contributions to a Roth account versus on a pre-tax basis.
  • While this encourages the usage of Roth strategies, education remains a hurdle. The industry needs to address misconceptions about annuities associated with Roth accounts.

From a tax perspective, the employer will need to have a discussion about what is best for their particular company regarding whatever the tax liability will be.
Matthew Hedley, Vice President of Retirement Services, OneDigital, MidAtlantic

In-Plan Retirement Income Solutions:

  • Hedley anticipates an uptick in in-plan retirement income plans over the next five to ten years. These plans provide guaranteed annuities, offering retirees reliable payouts similar to a steady paycheck.
  • The challenge lies in educating plan sponsors and participants about annuities. Institutional strategies can be flexible, more liquid, and cost-effective compared to retail annuities.

Expect employer matching in Roth accounts and in-plan retirement income solutions to shape the future of retirement plans. However, addressing education and misconceptions will be crucial for successful implementation.

For more insights, check out “Plans of the Future" from PLANADVISER here.

OneDigital offers comprehensive retirement and wealth services tailored to individuals and businesses. Whether you’re an individual seeking personalized financial guidance or a business looking to enhance retirement benefits, OneDigital’s services aim to empower clients on their financial journey.

For more information regarding the SECURE 2.0 Act, check out our SECURE 2.0 HUB.

Here, you can find more posts related to SECURE 2.0, and you can sign up to receive a complimentary review to ensure your plan meets the requirements for retirement plans.

For additional resources on this topic, check out "How the New Roth Contribution Rule Impacts Your Employees."

Investment advice is offered through OneDigital Investment Advisors LLC. These materials are provided for informational and educational purposes only and do not constitute a recommendation to buy, sell, or hold any security, nor do they constitute legal, accounting, investment, or tax advice. These statements do not constitute an offer or solicitation in any jurisdiction. The website links provided are for convenience only and do not constitute an endorsement or recommendation of the products or services offered therein. OneDigital Investment Advisors LLC is not responsible for the accuracy and validity of the content of those websites.